Qualcomm likely to announce thousands of job cuts and company break-up

Qualcomm is preparing to announce job cuts and a break-up of the company(Reuters)

US semiconductor major Qualcomm is set to announce thousands of job cuts and a strategic review of its business that may result in the break-up of the company, according to media reports.

Tech website the Information, citing sources, reported that the company is preparing to lay off several thousand employees due to challenges in the high-end smartphone business.

While cheaper smartphones powered by rivals MediaTek and Spreadtrum Communications are selling big in markets such as China and India, sales of high-end phones using Qualcomm chips are declining.

The company is expected to announce the job cuts, while it releases its quarterly results on 22 July, the Information said.

The Wall Street Journal separately reported that the company may look at the possibility of a break-up, amid mounting pressures from activist hedge fund Jana Partners.

A break-up would likely separate Qualcomm's chip-production business from its patent-licensing operation, WSJ noted.

The newspaper said the company may announce it is considering the break-up and other options including returning more cash to shareholders along with its third-quarter results. Qualcomm may also reshuffle its board and give Jana a say in adding independent directors.

In April, Jana revealed a $2bn (£1.3bn, €1.8bn) stake in Qualcomm, and the hedge fund has since then been urging the company to explore a break-up, cut costs, repurchase shares faster and bring new blood to its board.